Don't yet feel the pain of ignoring social media? Just wait a minute...

Only a few minutes ago (relatively speaking in the passage of time) most companies didn't think they needed to have a website or a domain name strategy. This seems as foolish now as ignoring social medial will seem in a few minutes from now.

In 1995 - a mere 13 years ago - I was a young associate in a downtown law firm making a pitch to a skeptical management committee at a weekend retreat that the firm needed a website and an email "system". It was not an easy sell. They "knew" lawyers would never send their own emails and certainly not use it to communicate with clients. Similarly they were convinced a website would likely not bring in any new clients and existing clients would not likely find a website useful. In the end, the only thing that convinced them of the need for a website was that it would likely be a good recruiting tool because it would make them seem hip to all the kids coming out of school. They finally also acquiesced to email only because it was seen to be an easy way to exchange documents with fellow attorneys.

How quickly they were proven wrong.

On a similar front, not that long ago many companies were caught without the domain names they would later need - or wish they had - related to their company names, product names, IP, etc. The most coveted .com domain name turf went to those with early foresight to be proactive and/or those with deep enough pockets to buy back the domains they wanted. Many companies wished they had not ignored the importance of domain names to their overall IP and business strategy.

We are at a similar technological threshold. Most companies are ignoring the importance of "social media" to their corporate strategy. Most consider using social media an unnecessary "luxury" in exactly the same way websites, domain names, and email were considered by people in their positions only a few years ago. They do not understand how social media is already changing the way they do business, the importance of staking position/profile early, nor the pain they will feel in the very near future for having failed to be proactive in building and leveraging online communities.

This is very understandable. In times of fiscal constraint one tends to focus on that which hurt you yesterday or causes you the most pain today. Nonetheless, the companies that will succeed tomorrow are looking at tomorrow now and preparing for it. Tomorrow's mainstream business activities involve social media as much as today's involves website and email.

For those thinking that this will be true only for businesses that deal direct with the retail consumer, you're dead wrong. If you have a constituency that you need to keep informed about and actively engaged in your company, then this applies to you. Whether its business (B2B) customers, investors, media, patients, recruits, employees, or collaborators, they are online and engaging in social media. If you're not there, they're listening to and engaging with someone else.

For those thinking this is just for tech companies or small companies (with small budgets that can't afford traditional media), you're also wrong. Pieter Kim has put together an enlightening list of examples of big companies now using social media: (http://www.beingpeterkim.com/2008/09/ive-been-thinki.html).

Let's start with some basics. I'll define "social media" as the 'interactive' side of the internet. So not the 'passive' sites where there is a one-way feed on information but rather Web 2.0 - those sites that have the capacity for readers to provide content, interact with the author/each other, and/or post comments or feedback. I'm talking about blog, podcasts, online communities, discussion boards, Wikis, and social networking sites.

This year Bioinformatics LLC announced the results of a survey of 1,500+ scientists in the life sciences primarily from North America (47%), Europe (36%), and Asia (11%) (http://lifesciencesocialmedia.com). Among their top 10 findings were the following:

1. Scientists interact with various forms of social media intermittently throughout the day

• 27-32% spending1-2 hrs/day on blogs, content aggregators/portals, discussion boards, social networking sites, audiocasts, and/or wikis).

2. Social media provide scientists with a fresh perspective in their decision-making process

• 30% said it has helped them "discover more options to solve a problem
• 24% "faster access to news, research, and trend information"

3. Social media appeals to the most fundamental values of science — communicating, contributing and collaborating.

• ~50% of respondents said blogs, discussion boards, and/or social networking sites "facilitate the sharing of ideas with colleagues and/or the scientific community"
• ~30+% said blogs, content aggregators, podcasts, and wikis allowed them to "make a more educated decisions about purchasing new products and/or technologies"
• ~40% said content aggregators, podcasts, and wikis made "it easier to research new products and/or technologies"
  

4. Tried-and-true discussion boards still dominate the social media landscape (50%) but online communities/social media sites were used by 30% of respondents in their "research and/or professional activities". Only 23% said they did not use any social media of any kind in their "research and/or professional activities".

5. Over half of respondents said they participate or "visit but don't participate" in online communities for their "research and/or professional activities.

6. Scientists agree that social media has influenced their purchasing decisions — but not the purchasing process.

7. Scientists want content that helps them better do their jobs. The top objection to using online communities was that "it would take too much time to maintain". Yet among users of social media, one of the top benefits cited was that it helped them do their jobs better.


There is no question the internet is now considered a primary resource of passive information access. Web 2.0's social media is all about making the internet the place to exchange information. Just as the best part of a lecture is often the post-talk Q&A or informal networking, web 2.0 is about online discussions. Users/participants of social media know that to maximize the value of these tools, one must share. The biblical maxim, "Give and you shall receive" applies here. You get out the same kind of value you put in. It's a discussion. It only works if both sides contribute. As with any form of networking, it always comes down to exchanging value. If you're only about self-promotion and not sharing something of value, you will be ignored and the benefits of social media will elude you.

Increasingly your constituents (customers, collaborators, investors, patients, employees, etc) expect to see you making a contribution to the online community. For many, being a good corporate citizen involves contributing value and exercising transparency and accountability. Increasingly they will select to do business with those companies they see and interact with online.

J&J and other pharmas now have blogs used to inform and interact with their constituents - media, patients, investors, etc. Many now have patient-oriented and/or disease-specific websites loaded with social media features. Even the NIH is using YouTube for clinical trial patient recruitment.

It is not enough now to build a website. For example, I spoke with a potential client just this week moaning that despite having a site for over a year it simply isn't showing up on search engines. You have to position your online content so people find it, have content that is useful to people vs simple self-promotion, and find ways to engage people: make them participate and keep them coming back.

Think beyond the website. Think professional society sites (e.g., ISCT, blogs). Think content aggregators (e.g., Cell Therapy News, BioSpace). Think business utilization of social media tools (e.g., LinkedIn, Facebook). Think blogging - corporate blog, employee blogging, following and commenting on blogs, and microblogging (e.g, Twitter). Think online discussion boards - monitoring for and posting content related to your business. Think using online tools that enhance search engine optimization and profile (e.g, Wikis). Think online audio-video content (e.g., podcasts, YouTube, Flickr) for education, training, profile, patient-recruitment, and general profile among media, investors, employees/recruits, etc.

And just in case you're still not convinced that your company must have a social media strategy, consider that your employees and customers are already there and likely dropping your company name. Here's a couple examples. I read people all the time on Twitter who regularly slag their job talking about things their boss would likely cringe at knowing were not just shared with a few friends but with all of Cyberspace in a searchable, eternally-archived way. If anyone is looking to work at their firms, a few online searches will bring up these threads. Another story I heard first-hand recently was of a young employee who was simply posting events of his day online including the troubles they were encountering with the technology s/he was working on. Information of the kind that would have been very informative to the competitor and not so comforting to the customers!

One simple application with enormous and immediate potential ROI is leveraging social media for sales and customer support. Online discussion groups or user groups are the easiest way to support customers and provide an information database for CSRs and product development teams. Building and mining "contacts" on social media sites is the modern-day version of the rolodex for sales teams. Contact lists easily convert to lead sheets, newsletter subscribers, and customers. Active participants in topical groups on social media (e.g., the Cell Therapy Industry group on LinkedIn) can be used to identify thought leaders, champions, detractors, etc. Furthermore they can be used as idea generators, beta thought-testing, focus groups, recruitment tools, etc.

Finally, hearkening back to my lawfirm days...maybe you just decide to use social media to recruit the new, smart kids. Just remember, its a little different world online so make sure your participation is genuine, transparent, and of value. With recruitment becoming increasingly competitive, leveraging social media may well be the only way to find and attract top talent.

Bottom line? There are so many different kinds of social media out there that can be used to reach so many different kinds of audiences at a fraction of the cost of traditional media that it's just good business to figure out how to use it to your advantage. In fact, you may be feeling the pain of ignoring it already and just don't know it...

Regenerative Medicine Industry in Need of a Voice?

Chris Mason (University of London) and I would like to get you talking.

Chris and his co-author Peter Dunhill have recently published an Editorial in the journal Regenerative Medicine entitled "The need for a regen industry voice".

They make a number of cogent arguments why the regen industry needs more to support its maturation than is currently provided by the existing organizations which represent pieces but not the whole of the regen industry. This is not to be critical of their support and, indeed, much acknowledgment must be given to their commitments to the industry. It is simply to suggest that it is not enough going forward and to pose the query - what does the regen industry need and how can we best put that in place?

They start by delineating some of the activities they believe could be addressed by an industry association (or cabal of industry associations) working on behalf of what they have have termed the “regen” sector. This is drawn largely from what has been done in the larger biotech sector.

Box 1 – Potential roles of an industry association addressing the regen sector

Business issues
1. Supporting pioneer companies who lack the critical mass to address the many issues that affect them.
2. Organising promotion of both technology push and market pull.
3. Helping to ensure sensibly drafted regulation and planning towards unified international agreement on regulations.
4. Working to achieve a balance on patents and disclosure of intellectual property which encourages risk taking entrepreneurs but does not block broad progress.
5. Addressing issues of reimbursement and health insurance and the necessity of cost assessment based on the short and longer term.
6. Cooperating to formulate national and international standards for terminology and technology.

Broader issues
7. Achieving a sensible expectation from regenerative medicine by being both proactive and also reactive to events and by avoiding hype.
8. Acting to address unethical and unregulated medical tourism and dubious practices.
9. Helping to build bridges between academics, clinicians and companies, and providing professional education.
10. Providing soundly based comment on difficult issues such as the use of embryo derived cells.
11. Facilitating dialogue between those developing human cell-based therapies and others addressing options such as gene based treatment and those using molecular agents.

Some of the issues facing existing associations in addressing the regen sector are summarized in Box 2.

Box 2 - Issues for existing biotech industrial associations contemplating embracing regen

1. Will biotech industry association members accept some diversion of resources to regen needs?
2. Is it possible for existing association to represent regen companies in the differing environments of the USA, EU and other key regions such as Asia?
3. Will there be conflicts of interest with biotech in encouraging investment from pharma and venture funds?
4. Could a biotech/pharma image on issues such as generics/biosimilars affect regen negatively?
5. Does regenerative medicine represent an opportunity to seek a better public-private partnership in medicine which would help all of the pharmaceutical sector?

They conclude as follows:

At present it would seem there is a real prospect that the existing biotech industrial association could provide at least some of what is needed. However, to achieve the roles summarised in Box 1 will take a core of interested, knowledgeable people who come together regularly with some secretariat help.

It will not be enough to just add occasional sessions to association internal discussions or public events though the latter does help to raise profile. As indicated earlier there are aspects where professional associations of scientists and clinicians can help as in educating their members on the new opportunities which regenerative medicine represents. They may also be important in arguing for sensible regulations and in helping to maintaining high professional standards. However, the interests of new companies need organisations with commercial and reimbursement issues deeply embedded in their instincts.

Though we seek solely to promote discussion, perhaps one possible attractive solution will be for regen companies to work hard to create proactive and effective groups within existing biotech associations. These could have the advantage of access to central resources but would allow a focus on those distinctive issues related to regen companies. Possibly too, where there are high local concentrations of regen companies it will be possible for them to have both some self-organised functions and an affiliation with national biotech organisations. From the comments we have received from those who have no particular vested interest, this approach seems to have support.

It has been suggested to us that without the equivalent of an Amgen or a Genentech no amount of work on associations or groups will really move the field forward. Though such a development plainly would help, the nurturing of regen to become the third arm of pharmaceuticals alongside small molecule drugs and biopharmaceuticals will be a patient process.

Developing supportive infrastructure and an articulate vision will help to clear obstacles that presently hold back the full flowering of early companies. It is in this sense that the issue is urgent. Whatever its form, regen needs a voice and we believe it needs it now.

I helped ISCT create its Cell Therapy Commercialization Committee to assist in addressing some of the needs Chris and Peter outline. But there are several obvious restrictions on that group's abilities, not the least of which are (a) it only pertains to the cell therapy sector of the regen industry, and (b) I try to chair the group in a volunteer capacity while keeping a day job or two and as the past few months have demonstrated that does not allow much time. I'm the first to acknowledge its limitations.

We'd like to hear from you on any of this but specifically we need input on two simple-to-state but not-easy-to-answer questions:

What kind of infrastructure and/or actions do you believe the industry needs (from existing or new orgs) to assist in its maturation?

What form (org, group, etc) would best beget and support that infrastructure and/or action?

Post your thoughts and comments

• here below,
  
• in the Discussion Board for the LinkedIn Cell Therapy Industry Group,
  
• tweet me on Twitter (@celltherapy), or
  
• email me @ celltherapygroup.com or Chris @ chrismason.com
  

It's your industry. Make it what you want. Let's give it what it needs.

Let's talk.

--Lee

Cell therapy is not the practice of medicine

I have several doctor friends who in the early days of cell therapy years ago argued that autologous cell therapies should be considered the practice of medicine - like stem cell transplants - and not require regulatory approval like drugs or devices. Indeed some of the motivation for the creation of industry self-accreditation bodies like FACT was to attempt to convince regulatory agencies that cell therapy products were best regulated by medical industry bodies. The FDA and other regulatory agencies were engaged in this discussion - they heard, they listened...and in large part they disagreed. My doctor friends came to grips with that reality and worked with the FDA to help create a regulatory framework that they now work within.

Even under the strictest regulatory frameworks there are some types of products which do not require formal approval. This blog will not be an overview of the regulatory distinctions between - for instance - s.351 and s.361 products (per FDA) but suffice it to say the differences between the products which do and do not require formal approval are, by now, fairly well defined in both US and Europe (albeit the latter only more recently). Furthermore, the regulatory agencies are eager to engage in dialogue with anyone who has questions about the proper regulatory pathway for their product.

And yet...there are those even now in the US and Europe who attempt to skirt the regulatory framework by conducting unauthorized and/or non-compliant clinical research and/or offering for sale commercial products without regulatory approval despite them falling clearly under the rubric of the regulatory requirements that such products be approved for such purposes.

It's one thing to be offering clinical products in unregulated markets that would would be or are regulated in other markets. I've previously opined here about the medical tourism industry and the issues it raises. But trying to conduct clinical research or sell clinical therapies that are not approved, in markets where there are clear rules governing the authorization to do so? Really?

Regrettably, yes. Two recent examples are described below. I'm not here to cast aspersions, don't want to spark any skirmishes, and certainly have no basis for suggesting impropriety on the part of those involved in these examples. I refer to these examples because they are recent, part of the public record, and, in my opinion, exemplify actions which should justifiably be called out and discouraged (if not penalized).

1. The first example comes out of Europe as described in recent reports in Science, MedPage Today, etc where the Lancet recently retracts a published article stating "... the editors rejected Dr. Strasser's assertion that products of tissue engineering are not medical products and therefore not subject to the Good Clinical Practice requirements."

Following is the report from MedPage Today (5 Sept 2008) :


Lancet Retratct Article on Incontinence Cell Therapy - Free Legal Forms

2. The second example comes from the US. Below is a copy of a recent letter sent to Regenerative Sciences, Inc (doing business as Regenexx) by the FDA .


FDA Warning Letter to Regenexx (Regenerative Sciences Inc - RSI) - Free Legal Forms

There are only three possible explanations I can come up with for why anyone would act as these two teams of people have done in clear contravention of the guidelines regulating their actions: (a) they simply don't understand, (b) they are looking to wage a fight or make a point, and/or (c) they believe their license to practice medicine supersedes regulatory authority (an argument long-ago tried, tested, and proven a loser). None of those reasons are justifiable in the circumstances.


In some instances, those who push the envelope help to shift the paradigm and improve the system they buck against. Even civil disobedience can - at least in retrospect - be occasionally justified if not even heralded as the impetus for positive change. This is not that.

This is playing with people's lives in clear contravention of the rules. That's not to say the FDA always has it right or that there are not issues to discuss or changes to make. The fact that neither of these treatments appear to pose any real risk to patient safety is certainly part of the argument for relaxed regulatory controls - I understand. But does that justify flagrant contravention of the guidelines as they exist using patients as pawns in the argument?

There are other ways to make this case. Go to a jurisdiction where the treatment is permitted, employ patient groups to lobby or litigate, engage industry and FDA in discussions to affect change in the regulatory regime.

Dear Doctor. The fact these therapies may be relatively harmless is no excuse for acting outside the regulatory framework and guidelines created to protect those people you're treating - agree with it or not, like it or not. Thanks.

--Lee

10 take-aways from CHI's CELLutions Summit

I attended CHI's Third Annual CELLutions summit in Boston August 11-13, 2008. Here's my 10 take-away items (in no particular order) bridged from my notes* :

1. David J. Mooney (Harvard School of Engineering & Applied Sciences) and team are bringing together disciplines in a way that may revolutionize cell therapy but are not yet hitting the headlines.

In mouse models they are currently loading biodegradable devices ex vivo with human PBMCs or cordblood-derived MNCs on a matrix to affect muscular regeneration or angiogenesis. The cells multiply inside the device and are then activated (via loaded agents) to migrate at a controlled rate undifferentiated into the region, then differentiate, and affect a therapeutic target.

The next generation device is intended to be implanted and then recruit cells in vivo rather than rely on cells being loaded ex vivo thus avoiding all the regulatory, technical, and scientific challenges of ex vivo cell manipulation. Early research has used the devise to generate immune responses by loading the device with antigen and APC activators for targeting cancer. This was definitely the technology-to-watch presentation of the conference.

2. One of the strengths of the conference has always been that it throws people in a room together that might not otherwise interact - from tissue engineering, cells-as-tools, cell therapy, etc. In keeping with point #1, interdisciplinary research is where some of most exciting research is happening today building on solid progress in each of the disciplines.

3. Unfettered optimism has been beaten out of all but the most inexperienced. There is much caution about ensuring there is no overreaching and little hype in presentations and projections. While this occasionally comes across almost like pessimism, keep in mind these are still people betting their careers on the sector - they're not THAT negative.

4. While there is no doubt that costs are higher for autologous therapies making investors less excited about them as a model than allogeneic therapies, price is the other 1/2 of the equation defining profit margin. Furthermore the cost differential may not be a as great as most believe depending on the therapy and particularly when compared to a point-of-care (PoC) model.

It is certainly too early to predict the end of the future of autologous cell therapies. For those using this as an excuse for their fear of a new business model -- we understand...

5. We still have yet to have a sustained and focused discussion on the business of cell therapies. As is so often the case, the commercial aspects of the sector was relegated to the last session of the conference when many had already left. This is regrettably typical. We need a conference primarily focused on the business side of the sector - business models, reimbursement, IP, leadership, financing, etc.

6. The war over MSCs (whatever that acronym has come to mean) is warming up but has real potential to get real hot. The true battle may emerge only once there is money to chase. Here's hoping constructive negotiations win the day and litigation does not crush the benefits of all the progress in the field. If there is no IP crusher, will MSCs quickly become a commodity? With so many MSCs out there from all sorts of sources working relatively similarly, will the real winners simply be determined by the marketplace?

7. 3D models and the companies that have them are about to make a significant impact in drug testing.

8. The work on iPS cells and hESCs are both incredible science a long way from the clinic and companies trying to race to the clinic with these cells would do well to study the lessons to be learned from the first generation of cell therapy and tissue engineering companies that commercialized products much earlier than could be done successfully/profitably.

9. Women in science are shattering the glass ceiling. I chaired what was a great panel discussion to end the conference and all 3 panelists were very experienced (but very young looking!) biotechnology executives in the cell therapy sectors.

10. Fenway Park is a rare time capsule of Americana that should be treated as a national treasure!

Just my thoughts...

--Lee

Cell Therapy Manufacturing Market

Just to prove I haven't abandoned serious blogging to become a cartoonist, I've got a heavy one for ya. Grab a beverage and a comfy chair - this one’s a little dense for a blog but I excerpted it out of an article I'm submitting for publication and didn't want it to go to waste...

This is my attempt to define the cell therapy manufacturing market. According to my database, there are currently 700+ stakeholder companies[i] in the cell therapy sector. This includes ~250 therapeutic “cell therapy” companies with approximately 344[ii] products in the market or in some stage of clinical or pre-clinical development[iii].

Companies
My data suggests the cell therapy products around the world (both commercially available and in development) can currently be broken down into the following categories:

Table 1
Manufacturing Costs
What follows is a sample analysis of one way to assess the manufacturing sector of the cell therapy market.

For the purposes of this analysis, I have assumed average spending at the various stages of therapeutic product manufacturing to be that shown in the table below. It must be noted that while these numbers are clearly within the range of what a company might spend at each phase they are chosen merely for illustrative purposes and are NOT the result of any researched conclusion that these numbers represent the average or mean amount spent by companies.

Table 2
Using those averages and based on the number of products in each stage as outlined in Table 1, the current global value of cell therapy product manufacturing would be estimated to be as follows:

Table 3
Manufacturing as a % of Global Cell Therapy Market
A $542 million manufacturing expenditure in 2008 would represent 2.2% of an overall market estimation of $25 billion (see my upcoming paper for more analysis of why I believe this is the best available estimate of the 2008 cell therapy market as I define it). This would average out to roughly $1.6 million per product and $2.2 million per company spent on manufacturing[vi].

To help test the accuracy of these calculations, Michael Lysaght graciously provided the data set behind his recent publication in Tissue Engineering[iv]. Lysaght provided the annual expenditures for over 150 therapeutic companies broken down by phase of development (pre-clinical, phase I, II, II, and commercial). The average expenditures per company by phase are shown below:

Table 4
Using the previous estimations of manufacturing costs-per-phase as shown in Table 2, one can estimate what percentage of overall annual expenditures is represented by manufacturing costs in the different phases of development. These are show below:

Table 5
Based on those figures, the overall estimated amount spent on manufacturing by these companies in 2008 would be $160 million. Using Lysaght’s current market estimate of $3.4 billion, $160 million represents 4.7% of the market.

Based on both these calculations, the amount of money spent on manufacturing as a percentage of the overall market would lie somewhere 2.2% and 4.7%.

If one applies these percentages to a broader market definition and the broader market assessment at $25 billion market, the manufacturing subsector would be between $550 million and $1.175 billion.

It should be noted, however, that Lysaght’s “market” does not include all therapeutic companies as I define the sector and also excludes tools, reagents, services, non-clinical research, etc.

It is also worth noting that percentage-of-market is quite different from percentage-of-expenditures. Most organizations developing therapeutics are likely to spend more like 10-20% of their cost of goods on manufacturing but the market is comprised of more than just therapeutic companies’ expenditures thus explaining the lower percentage as expressed as a percentage of the market.


Outsourced Manufacturing Market
Based on information gleaned from public sources and confidential discussions with the primary contract manufactures in the industry[viii], I believe approximately 40 of the total 340+ cell therapy products currently in development or on the market – approximately 12% - are being outsourced to corporate contract manufacturing organizations (CMOs)[ix] for manufacturing.

On another analysis, again based on information gleaned from public sources and confidential discussions with the primary contract manufactures in the industry[x], I believe not more than $60 million is being spent this year for CMO manufacturing services. This represents ~11% of the ~$550 million used in the sample analysis above.

Based on data from more mature predecessor biotechnology sectors, a number of experts believe the rate of manufacturing outsourcing will increases as the cell therapy industry matures.

According to a 2005 survey conducted by BioPlan Associates[xi], 35% of biomanufacturers were at that time outsourcing at least some of their biologics production in mammalian, microbial, yeast, plant, or insect systems. These manufacturers projected this number would increase by 30% by 2008. Overall, nearly half of all biopharmaceutical manufacturers responded that they might contract-out production of biologics by 2008. According to a 2005 Frost & Sullivan report, the global contract manufacturing industry for pharmaceuticals was then projected to grow at a rate of 11% over the next 6 years from $13.6 billion in 2005 to $25 billion in 2011 [xii].

I believe it is reasonable to assume that the percentage of products in the cell therapy sector being outsourced for manufacturing will increase.

In addition to a growing rate of outsourced manufacturing, it would be fair to assume growth in the overall dollar value of the outsourced manufacturing market based on the assumption that the products currently in commercial or mature stages of the development pipeline are comprised of a higher percentage of simpler and unregulated cell therapy products than is represented in the second wave of cell therapy products now making their way through the development pipeline.

While this may not represent a linear path of growth if the third wave of products are – more proportionately allogeneic and arguably again on the simpler side of the processing-complexity scale – it is reasonable to expect manufacturing costs to be higher for the same number of products over the next five years than they have been for the past 5 years. Depending on the development of embryonic stem cell (ESC) products, one can currently expect they will involve a more complex manufacturing process and therefore again raise manufacturing costs comparatively.

Based on this data and understanding and given an industry CAGR ranging from 13-40%, it would appear conservative to project that the global contract manufacturing business for cell therapy products will grow at a rate of at least 2% per year above the sectors’ CAGR over the next 5 years.


Summary
Based on the assumed manufacturing-expenditures-per-product-phase in Table 1, the total spent on cell therapy product manufacturing is estimated to be around $542 million.

Based on an estimated $25 billion cell therapy market in 2008, this means somewhere between 2.2% and 4.7% of the overall market is spent on manufacturing.

Approximately 11-12% of cell therapy product manufacturing is currently outsourced to private, industry contract manufacturers with this rate expected to grow faster than the market over the next number of years.

The assumed manufacturing-expenditures-per-product-phase in Table 1 are gross estimated averages. Changing these numbers skew the end result considerably. Consequently this is no better than a a rough-order-of-magnitude and sample assessment of the industry's manufacturing costs but I hope it serves to inform further discussion and better analysis.

As always, I welcome your comments and hope a few of you will read this close enough to point out any errors or ways we could improve this analysis ...

--Lee
_________________________________________________________________

[i] Estimates range from ~225 to ~300 therapeutic companies among what I define as ~700 stakeholder companies in the cell therapy industry. Sources: author’s database; Cell Therapy Pages (Connexon Communications); Proteus Venture Partners; Bionest Partners. Cell therapies and tissue engineering. February 2007; Burger SR. 2004. Cell and Gene Therapy - Challenges and Strategies for an Emerging Industry. Cell and Gene Therapy 5:9-14.
[ii] For the purposes of my analysis below I have lowered this to 329 product discounting basic stem cell transplants being done commercially by companies in various countries. Even the larger number (344) does not include pre-licensed “products” being researched or “developed” by academic institutions.
[iii] “Pre-clinical development” is defined to product in development prior to initiation of a phase I trial but not including products in the early research phase.
[iv] This figure is based on calculations from the data used by Michael Lysaght, PhD, Professor and Director of the Center for Biomedical Engineering at Brown University, in publication of Lysaght M, Jaklenec A, Deweerd E: Great Expectations: Private Sector Activity in Tissue Engineering, Regenerative Medicine, and Stem Cell Therapeutics. Tissue Eng 14, 305. 2008. That data indicates that the average annual spending of companies categorized as “commercial” was $30 million. I then assumed that manufacturing represents 10% of annual expenditures based on the calculation that manufacturing represents between 8-15% of annual expenditures cited by Lysaght in the data. Annual expenditure for commercial-stage manufacturing does and will vary wildly depending on the type of product and the volume of production by as much, for example, as $1.5 million and $80 million for production of 20,000 products per year - the difference largely driven by the products being allogeneic versus autologous.
[v] Calculated using 53 companies discounting for at least some of the basic stem cell transplants being done commercially by companies in various countries.
[vi] Calculated using 329 products and 250 companies.
[vii] Average annual expenditure of the 26 company in the Lysaght database with at least one product listed.
[viii] Lonza, Progenitor Cell Therapy, Cognate BioServices, Apptec Laboratories, Angel Biotechnology, Eufets, Cell Therapy Pty, and PharmaCell. We have not included products outsourced to other biotechnology companies using excess capacity to provide contract services not products outsourced to academic centers.
[ix] This excludes manufacturing being done by pharma partners, academic institutions or non-profit organizations.
[x] Lonza, Cognate BioServices, Apptec Laboratories, Angel Biotechnology, Eufets, Cell Therapy Pty, and PharmaCell. I have not included products outsourced to other biotechnology companies using excess capacity to provide contract services not products outsourced to academic centers.
[xi] “Advances in Large Scale Biopharmaceutical Manufacturing and Scale-Up Production, 2005”, a survey by BioPlan Associates, Inc. (2005), as quoted in Broeze RJ: Key Challenges facing Bio Manufacturing, BioProcessing & BioPartnering 1 (2006).
[xii] Frost & Sullivan: Global Pharmaceutical Contract Manufacturing Market 2005.

Cell Therapy Group Session? :)

Pardon the advert - didn't know where else to post my bitstrip fun?

Cell Therapy Market Overview

Below is my snapshot of the cell therapy sector and year-to-date activity - investments, business activity, and market size - that I just posted on docstoc and on my website. It's a very basic status overview of the business side of the industry. There is much more detail behind these summary slides but I can't give away everything now can I? :)


Cell Therapy Business-Market Summary (July 2008)

-- Lee Buckler
the Cell Therapy Group